Failed Golf Channel Back9Network Files for Bankruptcy
Back9Network, a golf channel that briefly aired on DirecTV, has filed for bankruptcy with a $2 million offer for a smartphone app that mapped out more than 35,000 golf courses around the world. Mike Ehrmann/Getty Images
A golf channel that briefly aired to DirecTV subscribers before shutting down in February has filed for bankruptcy with a $2 million offer for a small piece of its operations: a smartphone app that mapped out more than 35,000 golf courses around the world.
Officials who put Hartford, Conn.,-based Back9Network Inc., into bankruptcy on Dec. 23 said a handful of investors want to save the app and repay some of the channel’s debts, including a $4.75 million loan from Connecticut’s economic development agency.
The channel, which aired briefly on DirecTV satellite network’s channel 262, said it didn’t have enough money to get off the ground since its 2010 founding despite investors putting than $38 million to the company. It focused less on televising the sport and more on broadcasting live studio commentary and what it called “lifestyle” programming. Here is how ex-President Carlos Silva described the channel’s mission in a June 2014 interview:
“One of the comparisons I like to use is E! Entertainment at the Oscars. They do the on-ramp and off-ramp to the Oscars, but the live show is on ABC. We feel there are a lot of complements to being that on- and off-ramp to the live game—being able to feel like you were at Pinehurst even though you may never get to go to a U.S. Open. What’s it like to be at U.S. Open? What’s the town like? What are the restaurants like? What’s the travel like? How are the players getting in and out? Where are they staying? What’s the feeling like when you’re there during tournament week? That’s a lot of what will be on the Back9Network.”
But the channel tried to get its start as the television industry consolidated its offerings. Back9Network lawyers also blamed “the deceleration of U.S. pay television household growth” in documents filed in U.S. Bankruptcy Court in Hartford. The company, which once employed 80 people, is now down to two senior executives: Chief Executive Charles Cox and Chief Revenue Officer Reid Gorman.
Investors are proposing to buy the golf app from the rubble. The app has been downloaded more than three million times and provides GPS mapping for more than 35,000 golf courses in 130 countries, court papers said. It is used for hundreds of thousands of rounds each month.
“Despite failing to create a profitable television network, the [company has] succeeded in forming a compelling online platform consisting of widely-used online websites, the golf application and an email newsletter with a subscriber base of 1.7 million users,” lawyers said in court papers.
The five existing investors behind the $2 million offer are retired United Technologies Corp UTX -0.74%. executive Karl Krapek, private equity managing partner Denis Nayden, wood exporter Ted Rossi, KKR KKR +0.83% investment firm portfolio manager Paul Raether and Brian Furbish.
Under the purchase plan, the investors will continue to repay roughly $4.75 million in low-interest loans extended through Connecticut’s media tax credit program. The state’s decision to invest in the golf channel gave critics of Democratic Gov. Dan Malloy something to grumble about. As the Connecticut Post pointed out, Mr. Malloy’s former chief of staff is married to a former Back9Network employee. Former Democratic state Sen. Sanford Cloud Jr., his close ally, once served on its board.
The channel’s collapse stung an impressive list of more than 200 investors, including tech entrepreneurs, Wall Street executives, doctors and golf industry players. People who own small slices of the channel include New Jersey Devils part owner David Blitzer and UConn women’s basketball coach Geno Auriemma. It also names a Connecticut lottery winner whose Audi NSU.XE -0.30% caught on fire in 2010, though Bankruptcy Beat couldn’t confirm that the channel investor is the same unlucky person. (Check out the full list.)
Court papers show that the channel still owes contract severance money to golf personality John Maginnes and to South Carolina pageant queen Caite Upton, known for her 2007 national TV meltdown. Ms. Upton co-hosted a show called “Off Par,” which took “an inventive look at the world of golf and entertainment with a seriously comedic twist.”
The channel also owes consultant money to former PGA president Jim Remy.
Channel lawyers said they plan to file a repayment plan by Feb. 1. That plan will need approval from Judge Ann M. Nevins.
Correction: A previous chief of staff to Gov. Dan Malloy was married to a former Back9Network employee. An earlier version of this post incorrectly stated that Mr. Malloy’s current chief of staff is married to a current Back9Network employee. Also, former Democratic state Sen. Sanford Cloud Jr., was a Back9Network board member, not an employee.
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